Central Bank of Nigeria (CBN) yesterday debunked its former Governor and now Emir of Kano, Muhammadu Sanusi’s II claim last week that the Federal Government, under the President Muhammadu Buhari’s administration had overdrawn on its account with the apex Bank to the tune of N4.7 trillion.

Supporting its defence with data, the CBN, also the banker to the government, insisted that government still had a net balance of over N1.19 trillion in its Treasury Single Account (TSA) and declared Sanusi’s claims as “totally false and wholly fabricated.”

TSA is a financial policy introduced by the federal government in 2012, to consolidate all inflows from the country’s ministries, departments and agencies (MDAs) by way of deposit into commercial banks, traceable into a single account at the CBN

Quoting Section 38.2 of the CBN Act 2007, Sanusi had maintained that the Central Bank, a lender of last resort, had exceeded its lending limit to the government, a development he noted had weakened the credit worthiness of the country by the international community.

Speaking at a policy monitoring dialogue hosted by Savannah Centre for Diplomacy, Democracy and Development, at in Abuja last week, Sanusi said the CBN’s lending to the government since Buhari came in had spiked from about N1.5 trillion to over N4.5 trillion.

Sanusi also said: “The CBN-FGN relationship is no longer independent. In fact, one could argue their relationship has become unhealthy. CBN claims on the FGN now top N4.7 trillion equal to almost 50% of the FGN’s total domestic debt. This is a clear violation of the Central Bank Act of 2007 (Section 38.2), which caps advances to the FGN at 5% of last year’s revenues. Has CBN become the government’s lender of last or first resort?”

In his opinion, no one was willing to lend to the Nigerian government, noting, “If the Senate approved, I want to see who will lend you $30billion when you have five exchange rates.”

But in defence of its transaction with the government, in a statement made available to The Guardian in Lagos, the CBN said: “Contrary to his claims, the Federal Government’s Treasury Single Account (TSA) balance with the CBN as of 2nd December 2016 was N2.66 trillion (credit). In line with practices that even Emir Sanusi presided over, the FG has overdrawn another account at the CBN by about N1.47 trillion (debit) as of 2nd December 2016.

“In effect, therefore, the net balance of the FG at the CBN is over N1.19 trillion (credit), as shown in Table.

Despite the Emir’s seeming knowledge of these situations, the CBN wondered how “could Sanusi have reached the conclusion that the CBN’s claims on the FG are over N4.7 trillion? Where did he get this number?”
But Sanusi had argued that “the problem of the current government is not having the right policies to fix the current economic woes,” adding that the country is enmeshed in heavy debts, as out of every N1 Nigeria makes, 40 kobo goes to debt and 60 kobo is left for salaries, health, education, power, infrastructure.

He had argued that oil revenue is merely a working capital that cannot make the country rich, noting that while Nigeria produces one barrel for 80 Nigerians; Saudi Arabia produces one for three Saudis.

Besides, he noted that in every economic growth is driven by “consumption, investment and net export”, adding that “our exports cannot grow, without regulatory certainty or an increase in the price of oil.”

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Wole

Sanusi is proving to be an armchair critic. Talk is cheap

Wole

It is now obvious that without the implementation of TSA, the country would have collapsed financially. Kudos to the FG for the political will to implement it. In any case there was no choice because the crude oil income has vanished.

kalu9909

Without TSA, the economy would not have digressed into recession. it is the mopping up of the money and putting them into the TSA that resulted to lack of spending power, and thereby giving rise to economic recession. But now, the government wants to borrow US$30 billion in order to spend itself out of economic recession. The money in TSA is not helping the development and growth of the economy in this time of economic recession.

Wole

Kalu9909, when you say ‘lack of spending power’, let me ask, who is lacking the spending power? The related question to that is, who is the owner of the money in the TSA in the first place? Is it the Banks or Government? The Government who owns the money in the TSA decided to move it into 1 single TSA account system with CBN to minimize theft and concealing of govt. revenue by the banks. That cannot be the cause of recession, because govt. still have access to spend their money from the TSA. Govt. is the biggest spender in the economy and must have money to spend, otherwise there will be crises as we already seeing in many states that cannot pay even salaries and cannot sack the workers. The banks cannot continue to use govt. money as loanable funds to the private sector when the govt. itself does not have enough. The loan the govt. is asking for is to augment the shortage of govt. foreign exchange earning as a result of drop in crude oil price and general slump in govt revenues needed to fund the budget.

Mickey

You need one spiritual slap I swear. When you keep defending dumb govt, you end up just like them.
Govt funds comes very cheap and was used to augment loans to business. TSA is good but the implementation was poor. The system is yet to get over the shock it created
Now on that foreign loan, you need at least 6 spiritual slap to correct your head. Needless explaining any further, just ask google and I’m sure you will see enough analysis on it

Wole

I have heard about this spiritual slap from my Ibo friend, LOL. It seems is a common view to all Biafrans. I am not trying to defend the government, but they had their back against the wall and there is no other option because the government is running out of money. No thanks to the slump in crude oil price globally. The banks are making huge and fat profits from this so called cheap funds while government, the owner of the money is bleeding and cannot pay workers’ salaries while the bank executives are living large in banana island. Are we all created to serve the banks in Nigeria?

Mickey

Lol. I’m Ijaw and not Igbo but that doesn’t matter anyway.
No one stopped the govt from using their funds in whichever bank it was domiciled and also no one stop them from pulling all out. My concern is just the timing and approach.
BTW, what has the funds done for govt. Everyone is crying including them

Wole

So this spiritual slap is every where. Funny. My Ibo friend has promised to give me one very soon if I don’t repent from PMB followership. Spiritual slap, nice one, LOL.

Tritcall

So why can’t they pump in this money into the economy rather than borrowing $30m?

Either way, the country does not need to borrow any more money. CBN needs to stop mopping up cash with it expensive treasury lending, and the federal government needs to pursue policy that would spur growth. policies like increasing electricity production, refining crude oil, developing gas processing and supply, reducing our importation of food and increasing our production.

KennBest

The CBN needs to do the explanation to Nigerians in general and not Sanusi in particular. This government just needs to get their acts together or else they are gone come 2019. Very ineffectual and visionary-less bunch of imbeciles. Yes, you fought corruption, but that’s not enough. Nigerians are suffering too much.

Osgg Nigeria

PLEASE NIGERIANS NOTE – The money in the TSA belongs to the Government of Nigeria ( Federal, States & LGAs ). The Federal Govt. of Nigeria must share this income from all generating agencies with both States and LGAs. What right has the Federal Govt. alone to expend all the money in TSA. Pls CBN Governor tell Nigerians, if this is not collaborating with FGN to divert and pocket States & LGAs money. What is Corruption and Stealing ? ? ?